Tesla announced it plans to construct a manufacturing plant in India which will produce a car that sells for under $25,000. And why not? India is the largest country in the world by population and has the fourth largest new car market. It also has recently discovered large lithium deposits that could make it possible for India to become a major player in the EV revolution. BYD, which is currently the second largest manufacturer of pure electric vehicles in the world behind Tesla and the largest manufacturer of plugin vehicles, also announced this week it intends to build a battery factory in India. 

According to Reuters, BYD has submitted a $1 billion investment proposal to build electric cars and batteries in India in partnership with a local company, three people with direct knowledge of the plan said. Its partner is Hyderabad-based Megha Engineering and Infrastructures. 

BYD already has a presence in India where it sells the Atto 3 SUV and the e6 sedan to corporate fleets. It plans to launch its Seal luxury electric sedan there later this year. In the longer term, BYD expects to manufacture a lineup of electric cars in India, from hatchbacks to luxury models, one of the three people said. 

The production capacity of the new BYD factory in India is unknown at this time, but sources say the company intends to scale up production to 100,000 EVs annually in India over the next few years, but will likely begin by importing vehicle components that will be assembled in the country while it establishes a supply chain within India. The investment proposal also includes a plan by BYD and Megha Engineering to set up charging stations in India and build research and development and training centers, according to the sources Reuters spoke with.